Optimal Conjunctive Use of Surface and Groundwater with Recharge and Return Flows: Dynamic and Spatial Patterns
This paper derives the efficiency price patterns for a comprehensive spatial and dynamic model of conjunctive water use incorporating conveyance losses, canal return flows, and groundwater recharge. The first-best shadow price of surface water is composed of a charge for water that flows into the farm and differential credits for water that flows to other uses. The shadow prices can be used as the basis of water pricing schemes or for exchange rates to facilitate water trading. We show that farmers near the headworks use irrigation water in the optimal program, and only farmers more distant from the headworks extract groundwater. We also illustrate the possibility of reswitching in the sequence of resource use. It may be efficient for some farms to switch from one source to another and then switch back again, e.g. groundwater to surface water to groundwater.
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Volume (Year): 29 (2007)
Issue (Month): 3 ()
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- Johnson, Ronald N & Gisser, Micha, 1981. "The Definition of a Surface Water Right and Transferability," Journal of Law and Economics, University of Chicago Press, vol. 24(2), pages 273-288, October.
- Darrell Krulce & James A. Roumasset & Tom Wilson, 1997. "Optimal Management of a Renewable and Replaceable Resource: The Case of Coastal Groundwater," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1218-1228.
- Chakravorty, Ujjayant & Umetsu, Chieko, 2003. "Basinwide water management: a spatial model," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 1-23, January.